Why U.S. comics are not afraid of the digital age

In the United States comics have not been suffering from the advent of the digital economy. On the contrary, they appear to have found the recipe for producing an independent market that looks as though it’s going to take off impressively.

While everybody in the publishing industry is treating the new digital reality as a thorny issue, American comicshave managed to produce a lively market that is not eating away at paper sales; rather this sector has managed to exist as a parallel economy. The intense competition between Marvel and DC Comics, the two great powers in the sector, is encouraging the positive business of adaptation and innovations, the key to the financial health of American comics on all fronts.

Digital comics, a greatly thriving market in its own right

The digital wave has cast the shadow of a threat over the entire publishing world, but this new equation looked more complex for the comic and graphic novel industry, which was subject to additional technical constraints and stricter demands in terms of page layout. The American market, however, appears to have met the challenge by adapting quickly and successfully. This, at least, is what is suggested by the figures revealed by Milton Griepp, the CEO of ICv2, an information website specialising in analysing the pop culture economy, at Comic Con held in New York[+]NoteLarge meeting of professionals working in the pop sector, from manga to comics, via graphic novels and comics for children. Several cities hold their “large comic conference” every year, the most prestigious events being those of New York and San Diego.[1] in October 2012[+]NoteMilton Griepp expressed his views at a conference co-organised by ICv2 and Publishers Weekly.[2]. ICv2 is one of the first and rare entities to have attempted to estimate the state of the digital comic market[+]NoteGraphic novels in digital format are included in the digital comic category (considered to be a derivative of comics). [3], which remains a complicated area of study: publishers and distribution platforms of digital comics have indeed shown, from the outset, great reluctance to publish their sales figures.

According to the calculations of ICv2, the overall digital comic market, in the United States went from one million dollars in 2009 to 25 million dollars in 2011. These signs of good health are even more compelling for 2012 if the ICv2 estimates are to be believed: the turnover for the sector appears to have tripled over the first semester of the year compared with the first half of 2011. Milton Griepp even suggested that this tripling of the figure would hold true for the second half of the year and, ultimately, for 2012 as a whole[+]NoteThe conference took place in October 2012, so this suggestion of the situation for the whole year could only be taken as a forecast.[4]. The digital comic market could well reach 75 million for 2012, which comes to 10% of the paper comic market. In 2011, digital comicsonly appeared to account for between 1 and 1.4% of the total comic market in the United States (between 6 and 9 million dollars in terms of turnover). At the conference of ComicsPRO (American trade organisation for direct-market comic book retailers) in February 2011, Jim Lee, the associate editor of DC Comics, left an impression of people’s minds by placing a length of dental floss on a piece of A4 paper, showing an image of the tiny size of the digital comic marketcompared with the paper comic market. In 2012, Jim Lee was able to hold aloft this comparison to show the extent to which digital comics had taken off on the American market, which stands out as an unparalleled success in this field.

This success of digital comics has not harmed paper publications, whose overall turnover remained relatively stable in 2012 compared with the previous year, reaching 640 million dollars. It is, to a very large extent, comicsthat are pulling up paper and digital sales. The paper versions of graphic novels appear to be suffering from the disappearance of the large bookstore chain Borders, which was closed down in 2011[+]NoteThe sales of graphic novels in bookshops fell by 18% over the first half of 2012, according to ICv2 figures.[5]. The performance of the digital format is perhaps being held back by the strong “object value” of graphic novels, whereby the predominant model is that of one-off publications (unlike the traditional series format that applies to comics), and greater importance is placed on page layout and the size of the drawings. Graphic novels appear to be perceived by the readership community more as objects in their own right, something akin to an art object[+]NoteComics fans attached to the paper versions speak more readily of collection items.[6], which remains more authentic as a paper version.

Two essential factors contributed to the very good results for digital formats in 2012: the volume of comicsavailable in digital format has increased significantly, while publishers agreed to diversify their distribution platforms. In reality, both companies have borne alone the major part of this move to increase the offering: Marvel and DC Comics, historic competitors in the comicworld of super heroes. It is not at all surprising to note that it is the more popular and most successful sector of the American comic industry – the comic book– which has proven most dynamic in its ability to adapt to the new digital situation. It is even less surprising to find out that it is the leaders in this segment – Marvel and DC Comics, accounting for 80% of the American comic market, which has been the case since the start of the 1970s[+]NoteFigures by Diamond Comics Distributors.[7] – that are playing a leading role, taking on the most daring of initiatives. And, in exactly the same vein as the fight they have been engaged in since the beginning from an editorial view, Marvel and DC are extending their show of strength to their digital strategies. This competition has proven to have positive effects, for each one has to invest more and more to be the best on these new media.

DC Comics, pioneer of “day-and-date”

In the neck and neck race between Marvel and DC, DC was relegated to second place in terms of market share for the entire 2002-2010 period[+]NoteFigures by Diamond Comic Distributors.[8]. To reverse this trend, DC Comics chose to move ahead in the thus far relatively little exploited area of digital media, becoming the first comic publisher to offer a single day and date for bringing out the paper and digital versions of its publications. This policy referred to as “day-and-date” (some call it “same day as print”) was put in place in September 2011. DC decided to make this hitherto untried paper-digital alignment coincide with a highly expected editorial turnaround, the rebaunch of 52 of its leading comics. Rebaunch (a mix of reboot and relaunch) entails re-numbering a series – starting with the first edition. This strategic move, the rebaunch,started on 31 August 2011, referred to as The New 52, covered the essential “brands” such as the Justice League of America, Wonder Woman, Batman and Superman.

There no longer being a gap between the publication of the paper and digital versions held obvious symbolic value: digital publications, having been put on an equal footing with the paper editions, were given solid recognition. But the decision to make both surprise operations coincide – rebaunchand the alignment of publication dates – provided further indications of the strategic path that DC was taking, in particular with regard to readership policy. First, by giving the historic readership – fans not prepared to put off buying their comic book – a real choice between paper and digital, DC was making it easier to convert the most loyal readers to modern reading tools. Second, by re-launching essential titles in its catalogue, offered immediately in digital format, a generation of young readers, used to tablets and tools of this kind, but relatively disconnected from stories and magazines with a history that is (too) long, can be brought closer together.

It took Marvel six months to give in to this new “day-and-date” rule: from the end of March 2012, publishing the paper and digital versions on the same day was no longer the daring reserve of DC, and became the mark of those with a strong position in the market.

Comixology, pillar of the e-comics market

In their quest for new reading methods, both market leaders in comics chose to broaden their showcase and, as a logical extension of that, their sales force, by no longer offering their titles – for download or via streaming – on their own sites alone. Marvel and DC Comics each formed a partnership, one that is essential, with ComiXology. This is a distribution platform for comics,created in 2007, and which rapidly became the major reference for this segment. These two historic competitors may have signed up to an unusual form of cohabitation, but their presence on ComiXology puts them face to face for the first time with the small names in the graphic novel publishing world as well as with other comics.

Having achieved 70 million dollars of sales in 2012 (more than three times the 19 million dollars reached in 2011), ComiXology accounted for 80% of the digital comicmarket for 2012, according to the estimates of ICv2. If the actual platform plays a leading role in boosting the overall sales of e-comics, the importance of ComiXology also stems from its ability for technical innovation. In concrete terms, this online super-bookstore run by David Steinberger was a forerunner in the development of mobile applications for comics. For its own Comics application by ComiXology, first of all launched for the Internet, in July 2009, then for mobile reading devices, in April 2010, at the very time that Apple was putting its iPad on the market, the company developed its own reading technology, Guided View. The application by ComiXology was designed to be compatible with as many systems as possible (Web, iOS, Android, Kindle Fire, Windows8) and uses a very intuitive panel by panel reading system. Since its launch, Comics by ComiXology has been one of top 10 applications in terms of the number of downloads via iTunes. In December 2012, the application – which now offers over 30,000 graphic novels and comics to download – came in at a very respectable third place for the most downloaded applications via the Apple tool.

Guided View won over comic producers: Marvel and DC Comics entrusted ComiXology with the development of applications bearing their brand (first of all for iOS, then also for Android), just like Image Comics - an important reference in the back yard of “other” publishers of graphic novels and comics - known mainly for publishing The Walking Dead.

Dark Horse, owner of a large catalogue that contains the very successful Hell Boy franchise, was one of the first comic publishers to launch its application, at the start of 2011, without calling upon the expertise of ComiXology. Dark Horse Digital may have taken its own path, but the tool has attracted much criticism about its bad technical choices.

From the closed dc comics-amazon alliance...

While pursuing its great digital attack, DC Comics, in addition to the ComiXology site, chose to form a special alliance with Amazon. It was the American e-commerce giant that approached the publisher of Superman and Batman to set up a strong partnership. The partnership between DC and Amazon was announced 2011, just one month before Amazon launched its touch-screen tablet, Kindle Fire, on the American market. For the switch to this more advanced model – in colour too – of the Kindle (the Amazon e-reader that came out in 2007), the online sales specialist could not have hoped for a better way of adding value to its device than by revealing a range of graphic stories bearing the quality brand, DC. According to declarations made by the management of DC Entertainment, the parent company DC Comics, preparations for the collaboration with Amazon started two years earlier, because this was the amount of time needed to successfully transfer paper comicsto a digital format. Whatever the actual situation was regarding the respective schedules, the simultaneous move of both games companies towards digital products no doubt tipped the balance in favour of the Kindle Fire when it was launched. Amazon set up on its site a sales space with the DC Comics logo and brand design, offering for sale the paper versions as well as the digital editions of the games, with the digital versions being sold at half the price of the paper ones.

In fact, DC Entertainment agreed to transfer exclusivity of digital rights for around one hundred of its most popular titles[+]NoteIncluding the franchises of Superman, Batman, Green Lantern, Sandman and Watchmen.[9] to Amazon, including the franchises for The New 52. The number one competitor of Amazon, Barnes & Noble, determined to defend and add content to its own e-reader, the NOOK, quickly reacted to this pact, which it considered unfair, by withdrawing from its bookstores – some 1,300 points of sale – the physical copies of all the titles concerned by the exclusivity agreement. Books-a-Million, the third bookselling chain in the United States[+]NoteWith 231 points of sale.[10] followed suit a week later, by also withdrawing these titles. This is all the less surprising when you know that Books-a-Million sells the digital reader, B&N (Barnes & Noble). Both chains have said they refuse to engage in the absurd practice of becoming a storefront that serves the interests of Amazon, whereby they would be displaying books whose digital format would only be available on the e-reader of their competitor.

According to information from DC Entertainment, the exclusivity agreement with Amazon was only planned, originally, for a period of four months. It was as a reaction to the losses caused by the policy of withdrawing physical copies applied by Barnes & Noble and Books-a-Million that the term of the closed partnership was extended. To launch its counter-attack, B&N quite logically contacted the adversary of DC Comics, Marvel, signing up with the publisher of Spider-Man and X-Men to provide priority distribution of its titles in digital format. Even though the form of this agreement in no way involves exclusivity, the agreement offers NOOK the largest range of Marvel titles in digital format, compared with all other e-readers or tablets on the market.

... To deployment on all media

On the sidelines of this purely business conflict, the radical choice by DC of the Kindle by Amazon shook the readership. In the first communiqué by the partnership, DC Entertainment announced in the very title that its digital comicswould be available “exclusively on the newly announced Kindle Fire by Amazon”, but gave no technical details. We had to wait until the retaliation by Barnes & Noble for DC to announce that its comicswould eventually also be compatible with other tablets via the Kindle app. “Just because we’re starting with Amazon, this is not the be-all and end-all of our digital strategy and distribution” declared Jim Lee, the co-publisher of DC Entertainment. Had the original communication been ambiguous by mistake, or was this a change of direction after originally planning restricted technical compatibility? It was essential for DC to state its position as quickly as possible, faced with the increased threat of the illegal downloading of its products, as openly expressed in forums. Many iPad users in particular rhetorically asked how they would be able to follow the adventures of their favourite heroes, and then went on to thank the publisher for inviting them to download their digital comics for free (for free, read illegally).

Given that Marvel had started to offer content on iPad and iPhone from the end of February 2012, DC Comics could not allow itself to stand back. The end of the exclusivity contract with Amazon at the end of June 2012 made it possible, in the first instance, to make up with Barnes & Noble, which since then has been offering some DC titles in its digital catalogue. But, the main specific feature of DC Comics’ collaboration with Amazon and Barnes & Noble was its decision to keep the sale of its weekly and monthly issues for its own application and the mega-platform ComiXology. By creating ties with the iBook Store at the start of November 2012, DC chose to widen its intermediaries by opening up the sale of its monthly issues to catalogues available via Kindle and NOOK, a direction taken by its competitor Marvel when it entered iPad and iPhone.

Marvel, a digital showcase spread too thinly?

One of the essential differences between the digital strategy of Marvel and that of DC Comics is probably the choice to spread itself widely, as characterised by the publisher of Spider-Man, which is in contrast to the targeted actions of DC.

The download and streaming services offered by DC are concentrated on its own publishing sites (that of DC Comics and that of Vertigo, a subsidiary of DC), the large intermediaries that are ComiXology and the trio of Apple-B&N-Amazon, and the DC and Vertigo applications operated by ComiXology. Marvel, however, has chosen to cover all ground by adding to its list a relay on the Graphic.ly platform and the nth technical option, Marvel Comics on Chrome. The special feature of the Marvel Unlimited service, which gives unlimited access to 13,000 comics, for a monthly or annual subscription, should also be noted. The service, which was launched on the Internet, has had its own application since 2012. Yet these are not the only tools that have been put to the readers' consideration: two other apps, Marvel AR (playing with Augmented Reality) and Marvel Infinite Comics (which offers some kind of "Bonus comics", which narrative frames are directly related to titles included in more classical promotion schedules) appeared on the market in April 2012.

If we are to believe the results, the strategy of being everywhere at once seems to be paying off. Despite an increase of 200% in digital sales by DC in 2012, it is Marvel that has kept its position as leader, which was already well-established for its paper products, accounting for a market share of 34% for digital comics in 2012, compared with 31% for DC Comics, leaving little room for other players in the sector[+]NoteFigures from a study by Diamond Comics Distributor. The study was carried out with a sample of 3,500 individuals, comicsellers and readers.[11].

A market still brimming with possibilities

In March 2013, Marvel announced that it would be adding a soundtrack to its digital comics in the near future, reminding all those in the sector that the possibilities for developing comics via the digital vector had not yet been exhausted. The publisher, with its new tool called Project Gamma, intends to offer purely instrumental sound tracks for some of its comics: each panel will be accompanied by a theme tune that varies in intensity, and if the reader stays longer on the same panel the tune will be repeated, although there may be variations in key. Apart from the ambiance music, the characters’ actions may be linked to sound effects. The Project Gamma may be a simple gadget or a real creative add-on, but it will not appeal to the entire comic readership. But if it manages to find its audience, it could become a substantial argument to justify the existence of digital comicsas a cultural product in their own right, with high added value compared with the basic paper comic. In that case, the other majors in the sector could quickly follow suit and develop their own enriched version comics.

While some are counting on exploiting as yet untapped technical possibilities, others are using marketing intelligence and product synergies: several comic publishers, headed by Dark Horse (with Mass Effect and Dragon Age), have started to promote video games and comics at the same time (from the same franchise or simply linked by a general theme) and to attend video game conventions, with the aim of attracting the gamer public, which accounts for a larger group in terms of number than that of comic fans, and which has the advantage of sharing a liking for fantasy, combat and for ultra-modern worlds, as well as other traits that are common to video games and comics.

These aggressive business strategies implemented in a context where the connected reading tools market is being extended are a sign that the American digital comic market is likely to enjoy growth in the months and years to come. Very good figures have already been announced for 2013, which is encouraging stakeholders to invest even more in highly innovative reading formats.

1. Large meeting of professionals working in the pop sector, from manga to comics, via graphic novels and comics for children. Several cities hold their “large comic conference” every year, the most prestigious events being those of New York and San Diego.

2. Milton Griepp expressed his views at a conference co-organised by ICv2 and Publishers Weekly.

3. Graphic novels in digital format are included in the digital comic category (considered to be a derivative of comics).

4. The conference took place in October 2012, so this suggestion of the situation for the whole year could only be taken as a forecast.

5. The sales of graphic novels in bookshops fell by 18% over the first half of 2012, according to ICv2 figures.